Mortgage Interest Rate Dispersion in the Euro Area

Kok, Christoffer; Lichtenberger, Jung-Duk

doi:10.2139/ssrn.963151

Cited by 8 publications

(1 citation statement)

References 13 publications

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“…The level of Spanish and Irish mortgage rates was 2 to 3 percentage points lower than those in core countries at the time, 52 and there is empirical evidence that this mortgage rate gap is related to differences in institutions such as credit enforcement procedures, maximum loan-to-value ratios, and variable-rate mortgages. 53 A key asset other than bonds that may be affected by capital flows is real estate. Foreign property investors may drive up local house prices, which can trigger expectations of sustained price growth and thereby stimulate housing booms.…”

Section: Portfolio and Fdi Flows And Asset Pricesmentioning

confidence: 99%

Capital Flows and the Eurozone's North-South Divide

Köhler

2023

Politics & Society

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This article offers a monetary perspective on capital flows and the Eurozone's north-south divide. It argues that finance-centric narratives in comparative political economy rightly emphasize financial instability in the periphery, but that the role of capital flows therein requires clarification. The article draws on post-Keynesian monetary theory, coherent accounting, and balance-of-payments data to make three points. First, the focus on the financial account as a driver of current accounts should be abandoned in favor of an analysis of gross capital flows. Gross flows need not stem from excess savings in core countries and can be independent from trade flows. Second, explanations of financial instability in the periphery should go beyond bank flows and consider speculative portfolio flows into bond markets and foreign direct investment into real estate. Third, rising spreads in the periphery during the Eurozone crisis and the outbreak of the pandemic were not triggered by balance-of-payments problems but by a reversal of speculative bond flows. Comparative political economy should thus dedicate more attention to institutions that render peripheral countries susceptible to speculative flows into asset markets.

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Section: Portfolio and Fdi Flows And Asset Pricesmentioning

confidence: 99%

Capital Flows and the Eurozone's North-South Divide

Köhler

2023

Politics & Society

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A micro view on home equity withdrawal and its determinants: Evidence from Dutch households

Ebner

2013

Journal of Housing Economics

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Home equity is the most important part of a household portfolio, but only recently has it become more accessible through innovations in the mortgage market and financial deregulation. This study looks at the factors driving home equity withdrawal on a household level using Dutch survey data and assesses to which degree different theoretical predictions can be empirically supported. There is little evidence that equity withdrawal is used as a buffer against adverse income shocks, with financial motives and life-cycle effects likely to dominate a household's decision. Finally, the study provides first evidence of the impact of changing supply side conditions on home equity withdrawal.

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Interbank lending, network structure and default risk contagion

Zhang

2018

Physica A: Statistical Mechanics and its Applications

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Mortgage Interest Rate Dispersion in the Euro Area

Cited by 8 publications

References 13 publications

Capital Flows and the Eurozone's North-South Divide

Capital Flows and the Eurozone's North-South Divide

A micro view on home equity withdrawal and its determinants: Evidence from Dutch households

Interbank lending, network structure and default risk contagion

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